Jan 2013 Mid-month highlights of Singapore stock market

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Over the first three weeks of 2013, two Catalist stocks have moved to the Mainboard, one stock debuted on Catalist, two ETFs became non-SIP, earnings season has started and the ST Basic Materials Index and ST Telecommunications Index have outperformed the broader market.
 
The two companies that moved to the Mainboard in January are Interra Resources (5GI) and Swissco Holdings (5FD). Both companies have involvement with the Oil & Gas industry with Interra Resources categorised to the Oil & Gas producers sector by Industrial Classification Benchmark (ICB) and Swissco Holdings categorised to the Industrial Transportation sector by ICB. The FTSE Oil & Gas Index has firmed 3.0% in the month to date.
 
Sector outperformers in month thus far
 
Over the first three weeks of January the Straits Times Index (STI) firmed 1.4%. As discussed in Market updates last week the two outperforming FTSE ST sector indices in the month to date have been ST Basic Materials, gaining 17.5% (click here for Market Update) and ST Telecommunications, gaining 5.4% (click here for Market update). For the same period last year, ST Basic Materials was also the outperforming sector, however ST Telecommunications was the most laggard sector.
 
The average volatility of these two sector indices has differed in the past. The Raw Beta of these two sectors over the past two years is calculated by Bloomberg to be 1.62 for the ST Basic Materials Index and 0.52 for the ST Telecommunications Index. Raw Beta compares the average historical price volatility of a sector index to the volatility of the broader market. Stocks with a low beta, moved on average less than the STI. Stocks with a beta of more than 1.0 saw more volatility in returns than the STI. The two outperforming sectors in the month-to-date barbell two different volatility histories.
 
The two biggest stocks of the ST Basic Materials Index are Geo Energy (RE4) and Midas Holdings (5EN) with respective full market capitalisations of S$682 million and S$639 million. The two biggest stocks of the ST Telecommunications Index are Singtel (RE4) and Starhub (5EN) with respective full market capitalisations of S$55.6 billion and S$6.6 billion.
 
In the month thus far, the ST Financials Index, gaining +0.47% and ST Utilities Index, gaining 1.3% are the two laggard sector indices. The FTSE ST Mid Cap Index has gained 3.0% and the FTSE ST Small Cap Index has gained 5.3% in the month-to-date.
 
Earnings Season has started
 
Two STI stocks reported quarterly earnings last week, Singapore Press Holdings (T39) and CapitaMall Trust (C38U). This week, Singapore Exchange (S68), Capitaland (C31) and Keppel Corp (BN4) are expected to report. Over the past 12 months, the trailing dividend yield of these three stocks to the Friday close are 3.6% for Singapore Exchange, 2.1% for Capitaland and 3.9% for Keppel Corp. Earnings for Real Estate Investment Trusts (REITs) will be in focus, with 12 REITs expected to report this week. The full schedule for the release of the REITs quarterly reports can be found here.
 
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Logistic Holdings debuted up 15.2% on Catalist.
 
On Friday, the first IPO for the 2013, Logistics Holdings Limited (5VI), listed on Catalist. The issue price of Logistics Holdings was S$0.23 and first day close of S$0.265, which represented a first day gain of +15.2%.  The sponsor is PrimePartners Corporate Finance Pte Ltd and the Company, together with its subsidiaries, is principally engaged in building construction works as well as supply and installation of furniture/interior fitting-out works in Singapore. Logistics Holdings Limited is categorised by Industrial Classification benchmark to the Heavy Construction subsector. The largest five companies of this particular subsector are United Engineers (U04), Yoma Strategic Holdings (Z59), Guthrie GTS (G33), Boustead Singapore (F9D) and Low Keng Huat (F1E).
 
CIMB Asset Management’s two ETFs are now non-SIP

The CIMB FTSE ASEAN 40 ETF and CIMB S&P Ethical Asia Pacific Dividend ETF are no longer categorised as Specified Investment Products (SIPs). Click here for more details.

Source: SGX MyGateway

 

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Benefits of a balanced stock portfolio and how to achieve it

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In the first three sessions of 2013 the Straits Times Index (STI) firmed +1.84%. This morning’s open extended the 2013 gain to +2.11%. The strongest sector index over the last three sessions has been Basic Materials, followed by Consumer Goods. While all Sector Indices provided by FTSE Group are in the green over the first three sessions of 2013, all have performed differently. The REIT index gained the least over the three sessions.
 
Dividing investments over different sectors is common practice for investors that seek to diversify risk and return. Consider the recent different performances and constituents of the FTSE ST Oil & Gas Index and FTSE ST Telecommunications Index. The FTSE ST Oil & Gas Index is made up of 12 stocks versus the FTSE ST Telecommunications Index which is made up of 3 stocks.
 
On Friday, the FTSE ST Oil & Gas Index declined -0.24% while the FTSE ST Telecommunications Index gained +0.24%. This brought the 2013 to date gain for the Oil & Gas and Telecommunications Sector indices to similar levels of +1.45% and +1.53% respectively.  
 
Taking more time into consideration, the difference between sectoral performances has been more pronounced. Last year the FTSE ST Oil & Gas Index outperformed the STI by rising +23.8%. Taking reinvested dividends into consideration, the Oil & Gas Index return was boost to +27.9%. Meanwhile, the FTSE ST Telecommunications Index gained +8.6% over 2012 with dividends boosting the return to +13.8%. The simple average return of the two indices combined came to 20.9% including dividend distributions. By placing equal investment emphasis in the two sector indices, returns were smoothed across two sectors that performed differently.
 
The relative performance of the two indices was reversed in 2011. In 2011, the FTSE ST Oil & Gas Index declined -17.4%, while the Telecommunications Index gained +5.0%. Dividend distributions in 2011 meant the total return of the indices was boost to a -14.9% decline for Oil & Gas and a gain of +10.6% for Telecommunications. The simple average return of the two indices combined came to a decline of -2.2% including dividend distributions. Placing equal investment emphasis in the two sector indices reduced the risk of having all the eggs in an underperforming sector.
 
Both sector Indices have performed differently in the past with the Oil & Gas sector more cyclical than the Telecommunications Index. The past tendency for the Oil & Gas Index to swing more than Telecommunications is best exemplified through the volatility gauge for Telecommunications at 13.5%, less than half the same measure for Oil & Gas Index at 28.2% over a three year period ending December 31.
 
The five largest Oil & Gas stocks as categorised by Industry Classification Benchmark (ICB) and respective 2012 price performances are:

  • Keppel Corp (BN4, + 18.3%),
  • Sembcorp Marine (S51, +20.4%)
  • Sembcorp Industries (U96, +29.6%)
  • STX OSV Holdings (MS7, +12.1%)
  • Ezion Holdings (5ME, +156.1%)

 
The five largest telecommunication stocks as categorised by ICB and respective 2012 price performances are:

  • Singtel (Z74, +6.8%)
  • Total Access Communications USD (B2W, +14.8%)
  • Starhub (CC3, +30.2%)
  • M1 (B2F, +8.4%)
  • Keppel T & T (K11, +22.5%)  

 
Investors who wish to learn more about these stocks are encouraged to participate in the education events list below. Please note that two of the aforementioned Telco stocks, Total Access Communications and Keppel Telecommunications & Transportation are not highly active thus providing an element of liquidity risk.

 

Source: SGX MyGateWay

Continue ReadingBenefits of a balanced stock portfolio and how to achieve it

STI generates a +19.7% gain in 2012

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In 2012, the Straits Times Index (STI) rebounded from its 2011 decline, generating a gain of +19.7% over the year. Dividends boost the total return of the Index to +23.5% in 2012. Over the past three years the average annualised return of the STI including dividend distributions amounted to +6.4%.
 
The five best performing STI stocks over 2012 were CapitaMalls Asia (JS8, +72.1%), CapitaLand (C31, +67.4%), Global Logistics Properties (MC0, +58.4%), Fraser and Neave (F99, +55.8%) and Hong Kong Land (H78, +54.4%). The five underperforming STI stocks over 2012 were Wilmar International (F34, -33.0%), Olam International (O32, -26.8%), Genting Singapore (G13, -8.9%), Golden Agri Resources (E5H, -8.4%) and Jardine Cycle & Carriage (C07, -0.3%).
 
The broader universe of stocks as represented by the FTSE ST All-Share Index gained +22.2% in 2012. Reinvested dividends boosted the FTSE ST All-Share Index to +26.7%. The FTSE All Share Index is made up of the STI stocks, stocks of the FTSE ST Mid Cap Index and the stocks of the FTSE ST Small Cap Index.  The FTSE ST Mid Cap Index generated a +31.7% gain for the year, while the FTSE ST Small Cap Index gained 30.7%. Reinvested dividends boosted the respective indices to +39.3% and +36.6%. Last Monday more constituents were added to the FTSE All-Share Index, bringing the total number of constituents to 166 stocks.
 
The FTSE ST All-Share Index also represents the selection of stocks that make up the FTSE ST Sector Indices. The two best performing Sector Indices of 2012 have been Real Estate Holdings & Development (+56.0%) and Financials (+36.8%), while the two underperforming Sector Indices in 2012 have been Consumer Goods (-17.5%) and Health Care (-4.1%). Please note that the Financials Sector Index is a broad benchmark that includes Banks, the aforementioned Real Estate Holding & Development stocks, REITs and diversified financials. The two FTSE ST Sector Indices that posted the most similar returns to the STI were the Oil & Gas Index which gained in +23.8% in 2012 and the Utilities Index which gained +15.0%. While the Oil & Gas index includes some STI constituents the Utilities Index does include STI constituents.

Source: SGX My Gateway

Continue ReadingSTI generates a +19.7% gain in 2012